Project portfolio management and enterprise decision making: Benchmarking practices and outcomes

Effective decision making within the innovation project portfolio process is increasingly important toorganizational survival. Large sums are invested in innovation projects, however a significant proportion of thesedo not result in successful new products. Project Portfolio Management (PPM) methods aim to ensure that projectdecisions are made so that resources are most effectively allocated. PPM decisions should ultimately improvesuccess rates and increase the value of the innovation portfolio to the organization. This paper presents the resultsof research into innovation PPM practices and new product success levels. The benchmarking study used aresearch survey to collect information about PPM decision-making methods, attitudes, satisfaction levels, portfolioperformance and new product success levels. The results show that PPM practices in Australasia and NorthAmerica are surprisingly similar indicating that the findings in one region are likely to be relevant in the other.New product success measures correlated highly with established PPM processes in Australasia suggesting thatimproving PPM practices could boost innovation performance. The selection of the right number of projects fororganizational resources was confirmed as one of the biggest PPM challenges. Financial and strategic methods andcriteria dominate PPM decision making, however strategic methods and portfolio maps have the strongest positiveinfluence on portfolio performance measures.